Top 5 Emerging Fintech Hotspots in 2018

The number of financial technology companies is on a rise, and every year many of these new companies as well as established ones choose to situate themselves in cities that are not San Francisco or New York. In some cases, the establishment of one powerful player in a region automatically turns a place into a hub, but other times a community effort, perhaps backed by government initiatives or new regulation, can serve as an impetus for companies to set up shop in a particular location.

Each year Bank Innovation highlights five such emerging fintech hubs. Typically, the list contains cities within the U.S., but this year’s list includes two cities from neighboring countries that have seen a notable rise in fintech activity in the past the year. The list is presented in alphabetic order.

After more than a year, Mexico’s widely talked about Fintech Law went live this September. The law aims to regulate fintechs in crowdfunding, online payments, and cryptocurrency, among other areas, including money laundering, cybersecurity, and fraud issues, as well as open banking and data sharing between FIs and fintech through APIs. The law was originally presented by President Enrique Pena Nieto in March.

But even before this law, Mexico City enjoyed a robust ecosystem for fintech. It’s already home to fintechs like Bankaool, a challenger bank offering an annual interest rate of 3.75%; Conekta, an AI-powered platform develops that helps FIs in Latin America detect and prevent fraud; as well as CLIP, a Square Cash-like company that allows merchants to turn their phones and tablets into POS terminals.

The new Fintech Law will only make it easier for such fintechs to operate along with protecting the consumer. Not to mention, the regulated environment will encourage fintech and FIs around the world to interact with those in the country.